Dominate Your Market

Not long ago I was asked, "What is the most important thing Wisconsin manufacturers can do to improve their bottom line?" My answer . differentiate yourself.

Differentiation is the process of separating yourself from your competition by clearly defining in your customer’s mind something that you do better than anyone else.

In short, making your company different from everyone else in your marketplace.

I like to think of a target customer’s mind as a room full of file cabinets. Each file contains one, or maybe two companies that fill a certain need. So in the world of airlines there’s one file labeled "lowest cost". Southwest fills that file. Another folder is labeled "best service.” Midwest Express, with its first class leather seats at coach prices and chocolate chip cookies baked en route, is filed in that one. For this, Midwest is able to happily pocket a few extra dollars for every seat on every flight.

Unfortunately, none of the other airlines fit into any of the other folders, so they live in a cluttered pile on the floor. The net result - all the companies down on the floor compete on price - whoever’s got the cheapest fare gets the business. Not a good way to run a business!

Where does your company live? In a file folder, or on the floor? There’s your challenge, to put your company into a folder, removing yourself from the commodity low-price provider war, and dominating your marketplace by removing all other providers from consideration.

Let’s consider an example. Imagine that you have reduced your lead time from the industry standard eight weeks to four weeks with no expediting fee required. You can now offer the shortest lead times in the industry and have a powerful point on which you can differentiate your company.

Once you clearly imbed your "shortest lead time" differentiation in your customers. minds, they will think of you as the only possible solution when they need to have quick turnaround. The result? You will get orders you never would otherwise receive. But more importantly, because you’re the only possible non-premium short lead-time provider, you’ll be able to ask for reasonable prices and profit margins.

Test your claims

There are four tests to determine if a claim is appropriate for differentiation. Your claim must be:

Important and relevant to your customers . The ability to deliver high-precision placement may not be very important in the floor mopping business.

Exclusive and ownable. You’ll have problems if every one of your other competitors is delivering the exact same attribute. There is one exception to this rule. If you can be the first one in your marketplace to make a claim and you claim it loud enough, you can own that differentiating point. For example, almost all of the coffee brands contain Columbian-grown beans, yet there is only one brand that owns the positioning of being "Columbian Grown."

Something extra. It is very difficult to position on the overall concepts (as opposed to specific elements) of service or quality. Telling a customer that your products will always meet their specs creates the objection, "but that’s what I expect from all my suppliers." However, if you are able to deliver consistent results down to the 0.0001ths of an inch and no one else in your marketplace can do so, you have a viable differentiation based on quality.

Deliverable. If you cannot consistently deliver products in a four-week time frame, you had better not claim to provide the fastest lead times in the industry. Want to know more how-to’s of differentiating your company? Simply send an email to different@greatresults.com and we’ll send you a free special report on the subject. So if you truly want to add dollars to your bottom line, differentiate yourself. You’ll get great short and long-term results!

By Don Crowther

© Copyright 2003 by WMEP.org

WMEP provides technical expertise and hands-on implementation assistance to small and midsize manufacturing firms on advanced manufacturing technologies and business practices including lean manufacturing, ISO, value chain management, and strategic repositioning services for manufacturers and manufacturing facilities located in Wisconsin.

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